APR Explained: How Does Your Credit Card Interest Work? Money Instructor

What is APR on a credit card? Learn how APR (Annual Percentage Rate) influences credit card interest, its compounding effects, and strategies for smart credit card use.

A lesson on the intricacies of APR (Annual Percentage Rate) and how it impacts credit card users. Dive deep into understanding the true price of borrowing money on a credit card and how interest accumulates. Learn the difference between a straightforward annual percentage and the compounding effect of daily periodic rates. Discover the significance of terms like "introductory APR" and "balance transfer APR" and how they play a role in your financial decisions. The video also emphasizes the importance of paying off your full balance each month, highlighting the benefits of credit cards when used responsibly, such as cashback, rewards, and building credit history. A credit card and interest 101 tutorial.

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Money Instructor is the leading source for financial education and skills development. For over two decades, we have been assisting educators, students, parents, and others in teaching and learning about money skills, personal finance, money management, investing, business, and career development. We provide resources and tools to help teachers, parents, and institutions teach these crucial skills to young people. By doing so, we also aim to reinforce basic math, reading, vocabulary, and other fundamental skills that are essential for success in life.
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Money Instructor does not provide tax, legal or accounting advice. This material has been prepared for educational and informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors regarding your own situation. Although the information has been researched and vetted beforehand, it may not be current at the time of viewing.